Home News Ineffective BC can cost US$53K per minute

Ineffective BC can cost US$53K per minute

by Brian Sims

The Business Continuity Institute (BCI) has published a report to highlight the cost of common threats to organisations. Entitled ‘Counting the cost” a meta-analysis of the cost of ineffective business continuity,’ the study complies key finding from research around the world that detail how every minute counts when dealing with IT and telecommunications outage, data breach, cyber-attacks and adverse weather conditions. Having in place an effective business continuity management programme can spell the difference between organisational resilience and financial ruin. A recent study by IBM on professionals dependent on high-availability IT, says the cost of an IT/telecommunications outage can vary from US$1.04 million to US$14.25 million over 24 months. Minor incidents, on average, cost US$53,210 per minute of downtime. Further losses due to reputation-related costs can add up to US$5.27 million for substantial incidents. Analysis by the Ponemon Institute reveals that the average cost of data breach and cyber-attacks stands at an average of US$11.6 million annually. Organisations report costs ranging from US$1.3 million to US$58 million to resolve these incidents. Case studies reveal staggering losses of up to US$4 billion due to severe incidents of data breach and cyber-attack. Non-life reinsurance provider, Munich Re, reported that combined household and corporate insurance payouts for weather-related damage in the United States alone cost US$12.8 billion in 2013. Extreme weather phenomena have increased the severity of damage and value of insurance claims. Patrick Alcantara, Research Associate at the BCI and author of the report, comments:” The aim of the report is drive home the message that business continuity is not the sole domain of an organisation’s BC professional. Ensuring an effective, robust BC programme is also the responsibility of management, budget holders and the rest of staff. In a time where cutting budgets is the norm, it is important to be reminded of the cost of being caught flat-footed in an incident. The false economy created by cutting down on business continuity may create bigger problems that may impact on organisational resilience and viability.”

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